Shares of FTSE 100-listed Ashtead Group PLC (GB:AHT) declined after the company revealed its plans to move its primary listing to the U.S., alongside issuing a profit warning for FY25. The company lowered its full-year rental revenue growth forecast to 3%-5%, down from 5%-8%, and now expects FY25 profits to be lower than previously anticipated. AHT stock fell sharply by over 11% as of writing.
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Ashtead Group provides rental services for a wide range of construction and industrial equipment across various sectors.
Ashtead Highlights Weakness in U.S. Markets
In the first half of 2024, the company reported a year-over-year decline of 4% in its pre-tax profit of $1.19 billion. Meanwhile, its operating profits fell by 1% to $1.48 billion as compared to H1 2023. The decline was mainly attributed to weaker rental revenue growth in key U.S. markets and a smaller-than-expected boost from hurricane-related demand.
Moreover, the company stated that persistent high interest rates have slowed the construction sector’s recovery, impacting its sales in the U.S. As a result, it now projects 2% to 4% rental revenue growth in the U.S., down from the previous forecast of 4% to 7%.
Despite the weak outlook, the company launched a share buyback plan of up to $1.5 billion spread over the next 18 months.
Ashtead Set to Relocate Listing to New York
Along with its results, Ashtead announced its plans to relocate its primary listing to New York. The company aims to implement this plan within 12 to 18 months, subject to shareholders approval.
The company further said that relocating its listing to the U.S. is in the best interest of the business and its stakeholders. Notably, North America remains a core growth market for Ashtead, accounting for 98% of its operating profit in fiscal 2024.
What Is the Target Price for Ashtead?
On TipRanks, AHT stock has received a Strong Buy consensus rating based on five Buys and one Sell assigned in the last three months. The Ashtead share price target is 6,991.67p, which is 25% higher than the current trading levels.
